Business in Practice Assessment: Types of Companies Report - BMP3002

This report, prepared for the Business in Practice module (BMP3002), provides a comprehensive overview of various company types and their characteristics. It begins by differentiating business sizes, including micro, small, medium, and large enterprises, with examples. The report then explores different business structures, such as sole proprietorships, partnerships, limited liability companies, and cooperatives, detailing their features and providing examples. Furthermore, it examines the impact of organizational structures on business productivity, highlighting functional and divisional structures. The report concludes with a PESTLE analysis, evaluating how political, economic, social, technological, environmental, and legal factors affect business performance, using Unilever as a case study. This analysis provides insights into the dynamic nature of the business environment and its influence on organizational success.

Business Management with Foundation
BMP3002
Business in Practice
Assessment 1
Types of Companies
Submitted by:
Name:
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Table of Contents
INTRODUCTION..........................................................................................................................3
Section 1: Different business size and their characteristics with examples..............................3
Section 2: Different Business from sole proprietors, partnership, limited liability to
cooperative business..................................................................................................................5
Section 3: various business structures and external factors which create an impact on
business environment................................................................................................................7
3.1 Identification of different organizational structures and explaining how does
organizational structure affect business productivity...........................................................7
3.2 How different external factors affect the performance of a business – PESTLE Analysis
...............................................................................................................................................8
CONCLUSION..............................................................................................................................9
REFERENCES.............................................................................................................................10
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INTRODUCTION
Business environment is a set of people, companies and other responsible aspects
which can influence a business directly or indirectly. Such factors of business environment
affects the performance, profitability and growth of organization through which a company
can face huge loss. The nature of business environment is dynamic as it is unpredictable due
to rapidly changing consumer demand and market trends which needs to be regularly
monitored and evaluated (Antero, 2015). Unilever is a consumer goods company which
offers wide variety of products through which they can target the market and make their
business profitable. It is a British multinational company which is based in London, England.
The products which are offered by company are sold to 190 countries through which business
aims to make huge market share. This market research is based on various size of a company,
on their organizational structure an evaluation of factors which influence the business
environment.
Section 1: Different business size and their characteristics with examples
Business environment involves two factors which affects functioning of their
management, such responsible factors are internal and external factors. The external factors
which affects business environment consists of micro and macro factors which can create an
impact on business operation in negative and positive manner. There are different scale and
mediums through which a business operates, such business size are discussed below:
Micro business:
A micro business entity functions with maximum 10 employees in their organization.
Such business are owned by sole proprietors or such owners are self-employed. A micro
business have their turnover under £2 million. Such business entities operate on small scale
level as they are started with low capital investment rate and such business owners have less
valued machinery through which they an perform the functions of management (Cohen,
2017).
The basic characteristics of a micro business entity are such business have limited
liability and single owner only hold all liability of business. Another feature of micro
business owners is that they are more willing to take risk so that they can enhance their
business growth and earn maximum profit from sale of their products and services.
For example, CafePod Coffee Co. is a micro level business which focus on providing
best coffee products and services to their customer and market.
Small size business:
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A small business entity is formed with low capital investment and labor forces
involved in such business are low in number through which management an function their
planned activities. Such business industries manufacture and sell goods at smaller scale
through which they can enhance business growth and make their business profitable (Glass
and Cook, 2018).
The basic characteristics of small scale business are that these business entities hold
limited reach, labor involved are intensive, have more flexibility and resources can be utilized
effectively.
For example, ETSY is a small scale business through which focus on offering a
medium for buyers and sellers. The business focus on recycling products and on offering
products at low range with maintaining the quality.
Medium size business:
A medium scale enterprise are those business which functions as SME, such business
have employees under 250 who participate in managerial functions and contribute in
achievement of organizational goals. The turnover of such medium scale business are less
than £25 million. Such business organization aims to enhance business growth, success and
focus on making their organization profitable.
The characteristics of medium size business are that the business owners of these
entities are more passionate and also persistent who focus on enhancing business for
organizational growth through regularly monitoring and analyzing business environment.
These business owners are habitat to operate under high pressure, and always focus on
enhancing their skills and competencies trough which they can gain competitive advantage
for their business (Kretovics and Eckert, 2019).
For example, Captify is a medium size business and is a data driven medium through
which they provide services which are specialized in search intelligence and media
decisions.
Large size business:
Large business organizations are companies which are operating on large level and
have their branches into various cities and countries all around the globe. Such business
organization have huge number of employees who contribute in achievement of
organizational goals and objectives. These business organizations help contribute in
economic growth and thus more employment opportunities can be offered to individuals
through which living standard can be enhanced.
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The basic features of large business are that such organization use high and advanced
technology and huge capital investment is required to build and maintain a successful large
business entity in industry (Lampel and Germain, 2016).
For example, Unilever is a multinational company that offers consumer goods and is
operating globally through which they provide products to customers all around the globe.
Section 2: Different Business from sole proprietors, partnership, limited
liability to cooperative business
Sole trader business:
The business entities which are under the ownership and management of single person
are termed as sole proprietorship. These entities do not have a separate legal entity. The
proprietors hold the responsibility of their debts single handedly. Also, all the taxes which the
form is liable to pay and the profits which will be earned come into the account of owner or
the proprietor of the business. These type of business entities lack government regulations.
The characteristics of sole proprietorship include- Unlimited liability, no legal
formalities, single ownership and sole management.
For example, OCP, lab solutions and other companies are few examples of sole
traders.
Partnership:
The business entities which involve a formal agreement between two or more people
in order to manage all operations and functions of management. The partners in this type of
entity share all the profits and debts equally. This involves two types of partners – Active
partners, who are involved in all the day to day practices of the firm and Dormant or sleeping
partner who don't take involvement in day to day activities of the firm (Malott, 2016).
The general features of partnership are- Profit sharing, partnership deed, non-transfer
ability of interest, fusion of ownership and control and firm registration.
For example, Uber, Redbull are few examples of partnership companies.
Limited liability business:
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A limited liability company is a type of business entity where business and the owner
hold a limited liability in the business. These business entity are created and functioned under
law. The dissolution of such companies also take place under the governance of state law.
The general features of limited liability company are- separate legal entity, limited
liabilities, flexible taxation, owners act as member (McKenzie and Woodruff, 2015).
For example, Westinghouse, Blockbuster and other companies perform their
managerial functions as limited liability business.
Public limited liability business:
Public liability businesses are voluntary incorporated association and they hold a
separate legal entity. The members of these company hold a limited liability in the
management operations.
The general features of such business entities are- separate legal entity, abided by the
government rules, laws and regulations, Minimum requirement 0f 7 members and no limit on
maximum members in the organization, freely transferable shares with prior consent or
notice of shareholders.
For example, United banks and other companies acts as public liability business
through which they can perform managerial functions.
Cooperative:
It s a private business entity which is fully owned and controlled by owners who use
products, supplies and services which are provided by such business (Mustafa, 2015). These
companies can vary in size as such business depends on number of members who are
incorporated with organization who participate together for the accomplishment of
organizational goals and objectives. Such business aims to promote common interest of less
powerful members of society through which they can promote the objective and working
collectively for achieving targets and goals.
The general characteristics of cooperative business are as follows: membership in
business are voluntary and open, finances involve in these business are a collective
contribution from the members of business.
For example, England co-operative bank acts as a cooperative business which
contribute for welfare of society and through participation of all members.
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Section 3: various business structures and external factors which create an
impact on business environment
There are different type of business structures through which a business operates,
some of the structures are as follows: sole proprietorship, partnership, limited partnership,
corporation and others (Ortiz‐de‐Mandojana and Bansal, 2016). There are several external
factors which can influence business environment trough which management operations can
be affected. Some of the external factors which affect business are political, social,
technological, economical, environmental and legal. These external factors are analyzed by
business through which they can monitor changing patterns and trends.
3.1 Identification of different organizational structures and explaining how does
organizational structure affect business productivity
A organizational structure is a layout through which all activities and tasks are
strategically planned through which organizational goals can be met. Organizational structure
creates a base or foundation and set standards through which a business can function
accordingly, utilize resources and gain competitive advantage. There are several types of
organizational structures, some of the structures are explained below:
Functional Organizational Structure- This structure followed by organizations help
them to group all employees based on their specialized skills, knowledge and competencies.
There organizational structures operate within stable business environment and thus it creates
a barrier for business to monitor changes quickly. Such business organizations are more more
productive and employees work in their specialized area of interest.
Divisional Organizational Structure-These organizational structures align all
activities of business around factors such as geographical, market, product and service
groups. All the divisions of organization have to perform assigned functions, roles and
responsibilities. These organizational structure help business to operate at regional level and
decisions can be made at each division through which business can gain competitive
advantage from their operations.
Impact of organizational structure on business productivity
 Growth: A strong organizational structure help an organization to have good business
growth through which they can gain competitive advantage and make their business
more profitable (Retamal, 2017). Organizational structure enhances productivity and
economic growth of business through which organization can utilize resources
efficiently and for effective decisions for business.
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 Creativity and innovation: Through following an organizational structure that
encourage all employee to participate in managerial functions will help organization
in enhancing employee creativity and better decisions can be made based on their
ideas through which organizational objectives can be accomplished.
3.2 How different external factors affect the performance of a business –
PESTLE Analysis
PESTLE analysis is a tool which is used to identify the external forces which affect
the organization. The acronym PESTLE stands for Political, Economic, Social,
Technological, Environmental and Legal. It is a situational analysis which is mandatory to be
conducted in an organization in order to formulate and implement the strategies (Tura,
Keränen and Patala, 2019). The PESTEL analysis of Unilever is explained below:
POLITICAL FACTORS
The political factors of Unilever is affected by the European and American laws. It is
subjected to the regulation, restrictions and guidelines provided by the European commission
and the Food and Drug Administration in the United States of America. In case of failure to
compliance, the organization may face legal issues. The organization is liable to all local ,
regional and global rules of each country where the products are distributed. Restrictions
regarding imports, exports or trade laws might affect the success of the organization.
ECONOMIC FACTORS
Economic factors state the availability of competition in the market. The economic
factor states that the consumer is less likely to buy expensive products. The goods with lower
prices are more in demand. There are many organizations which are rising in competition
with Unilever. The demand directly affects the supply of the organization. If the products are
not in demand, it will have negative effects on the cash flow and profits.
SOCIAL FACTORS
Unilever has a wide range of brands and hence it has a focus on building and
enhancing the strong reputation of the organization (Molthan-Hill, 2017). The emphasis of
the organization is on the issues related to the social and environmental factors. Many of the
Unilever's products focus on the personal care and well-being, in order to help people feel
and look good. The organization aims to provide people with a better standard of living.
TECHNOLOGICAL FACTORS
Unilever is consistently working in order to produce new goods and sell them online
at the different locations. The emphasis of company is on developing its digital marketing
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and selling methods. Unilever has a high level of automation allowing the supply and store of
products at the locations quickly which leads to increase in the cash flow, profit and
goodwill.
ENVIRONMENTAL FACTORS
Environmental factors refer to the factors which help the environment to build and
sustain. Unilever works to promote and sustain the renewable resources. The products of
Unilever are designed in order to meet the safety standards for consumers in every market.
The organization aims to provide an Eco friendly and environment friendly material to its
consumers.
LEGAL FACTORS
Unilever is subjected to many rules, regulations and legal formalities as it operates as
a consumer goods company (Laïfi and Josserand, 2016). Unilever owns more than 400
brands under its name in food, health, personal care any many other industries. Each and
every brand of the Unilever is a subject to follow the copyright, product safety, laws
regarding health and safety of employees and taxes both at the international and regional
level.
CONCLUSION
From the above mentioned project report, it can be concluded that business operates at
various size. There are different mediums through which a business operates, some are: sole
proprietorship, partnership, limited liability and public liability. There are various
organizational structures through which a business operates and perform their functions and
these structures can make business earn profits from strategically planning and forming
decisions through which organizational goals can be accomplished.
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REFERENCES
Books and journals
Antero, M. C., 2015. A Multi-case Analysis of the Development of Enterprise Resource
Planning Systems (ERP) Business Practices. Frederiksberg: Copenhagen Business
School (CBS).
Cohen, E., 2017. CSR for HR: A necessary partnership for advancing responsible business
practices. Routledge.
Glass, C. and Cook, A., 2018. Do women leaders promote positive change? Analyzing the
effect of gender on business practices and diversity initiatives. Human Resource
Management. 57(4). pp.823-837.
Kretovics, M. A. and Eckert, E., 2019. Business practices in higher education: A guide for
today's administrators. Routledge.
Lampel, J. and Germain, O., 2016. Creative industries as hubs of new organizational and
business practices.
Malott, M. E., 2016. Selection of business practices in the midst of evolving
complexity. Journal of Organizational Behavior Management. 36(2-3). pp.103-122.
McKenzie, D. and Woodruff, C., 2015. Business practices in small firms in developing
countries. The World Bank.
Mustafa, B., 2015. Inspiring best business practices. Journal of Emerging Economies and
Islamic Research. 3(3). pp.1-8.
Ortiz‐de‐Mandojana, N. and Bansal, P., 2016. The long‐term benefits of organizational
resilience through sustainable business practices. Strategic Management
Journal. 37(8). pp.1615-1631.
Retamal, M., 2017. Product-service systems in Southeast Asia: Business practices and factors
influencing environmental sustainability. Journal of Cleaner Production. 143.
pp.894-903.
Tura, N., Keränen, J. and Patala, S., 2019. The darker side of sustainability: Tensions from
sustainable business practices in business networks. Industrial Marketing
Management. 77. pp.221-231.
Molthan-Hill, P., 2017. The business student's guide to sustainable management: Principles
and practice. Routledge.
Laïfi, A. and Josserand, E., 2016. Legitimation in practice: A new digital publishing business
model. Journal of business Research. 69(7). pp.2343-2352.
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